NatWest and the Federation of Small Businesses (FSB) have partnered to analyze and support UK businesses grappling with the ongoing cost of living crisis.
The current economic situation has significantly disrupted the UK’s sustainability efforts. Recent energy price increases present fresh challenges for small businesses, raising concerns about their ability to achieve long-term sustainability and Net Zero ambitions. Many small and medium-sized enterprises (SMEs) may find themselves prioritizing immediate cash flow needs over sustainable investments in their energy infrastructures due to the crisis.
Research conducted by NatWest and FSB reveals that over half of UK small businesses are interested in investing in green energy in the coming years. However, there is growing anxiety that the energy crisis could halt substantial sustainability investments.
To address these concerns, NatWest will lower the minimum requirement for Green Loan applications to £25,000 starting in October, enabling more SMEs to qualify for funding toward sustainable energy solutions such as solar panels, heat pumps, and improved insulation. Additionally, the bank will eliminate the minimum charge for Business Current Accounts and will not increase published tariffs and fees for the next year.
The UK Government is also acknowledging the difficulties that SMEs face and has announced plans to extend support and implement price caps for those in need.
Martin McTague, chair of the Federation of Small Businesses, expressed relief at the Government’s recognition of the urgent energy pricing situation, welcoming the recent support measures. However, he pointed out that uncertainty remains, with many small businesses facing potential challenges beyond the next six months.
Andrew Harrison, head of business banking at NatWest, emphasized the critical nature of supporting businesses during this crisis. He stated, “This is a pivotal moment in our response to the climate crisis. The economic landscape makes it difficult for SMEs keen to invest in green initiatives, as they are compelled to focus on immediate concerns due to rising energy costs.”
He warned that neglecting long-term investments could leave small businesses behind in green innovation, making them less competitive and more vulnerable to future economic shocks, while hampering their contributions to the UK’s climate objectives. “We must facilitate long-term investment in clean technology that can lead to more stable energy pricing and a resilient UK energy framework,” Harrison added.
Earlier this year, NatWest launched a carbon planner designed to help businesses monitor their carbon emissions and work towards reducing their environmental impact.
For further engagement and knowledge exchange, Finextra has announced its fifth Sustainable Finance Live conference and hackathon, set for November 29. More details and registration information can be found on the event page.